Hi all,
I have been floating around the forum for a while but I have finally decided to post.
I was wondering what strategies you experienced SS'ser have (if any) to help with the waves of investing. Namely for us we have quite a few IP's and some that we were planning to develop and equity growth has been very kind to us in the last few years to enable us to keep growing but we have found with the banks changing lending criteria and LVR's it has been harder and harder to keep moving forward with our original goals.
We found it pretty tough when we got knocked back for our 'standard' buffer refinance and were truly shocked at the valuations that came back to us. Some of the properties were fairly severely negative so our overall LVR took a real hammering. It seemed the main change was that as we were part way through sub-dividing the land etc in the past valuers seem to take into account approval (WAPC in our case) but in recent days they are only interested if the blocks have all site-works completed and seperate titles issued.... pretty huge cashflow difference as if they will not lend to assist you complete the process. I suppose it isn't helped by others offloading development blocks for the same value as singles due to the *fear factor*.
I suppose this means this is the first time we have really had to look at our holding costs... without buffers. We are very happy with property and feel it is a really superior asset class so we are committed to making it work out and hold on to our portfolio unless forced to do otherwise. Being self employed this is also the first time we have really noticed that cashflow is king and that even though we have upped the amount of work we are putting out there in our business there is a pretty significant time lag between that and payment..... and banks dont like to wait for repayments! (even though they have to at the moment)
Other creative means we are thinking of is upping our yield from the properties. Some that were on long term rent we have now furnished and are putting out for short term lease, much improved yield (although greater vacancy risk and of course more risk of damage as more *stuff* to get wrecked)
In terms of development we are unsure whether to use what valuable cashflow we have left after the above to try and move forward or just hold on until the general property environment moves in a more upward direction.
Are there any others out there facing the same dilemmas? We are very pleased with the growth we have had in our investing journey so far and even though we view this stage as just an "opportunity to consolidate" it can get pretty tough trying to make long term decisions whilst juggling the month to month stuff. We think this downward or flat cycle (in Perth mainly) might last up to another 2 years or so and maybe that is the time to keep pushing on because we would hate to risk our portfolio on developments that might not be as lucrative as we first thought.
Love to hear others ideas and strategies...it all helps!
Thank you all
I have been floating around the forum for a while but I have finally decided to post.
I was wondering what strategies you experienced SS'ser have (if any) to help with the waves of investing. Namely for us we have quite a few IP's and some that we were planning to develop and equity growth has been very kind to us in the last few years to enable us to keep growing but we have found with the banks changing lending criteria and LVR's it has been harder and harder to keep moving forward with our original goals.
We found it pretty tough when we got knocked back for our 'standard' buffer refinance and were truly shocked at the valuations that came back to us. Some of the properties were fairly severely negative so our overall LVR took a real hammering. It seemed the main change was that as we were part way through sub-dividing the land etc in the past valuers seem to take into account approval (WAPC in our case) but in recent days they are only interested if the blocks have all site-works completed and seperate titles issued.... pretty huge cashflow difference as if they will not lend to assist you complete the process. I suppose it isn't helped by others offloading development blocks for the same value as singles due to the *fear factor*.
I suppose this means this is the first time we have really had to look at our holding costs... without buffers. We are very happy with property and feel it is a really superior asset class so we are committed to making it work out and hold on to our portfolio unless forced to do otherwise. Being self employed this is also the first time we have really noticed that cashflow is king and that even though we have upped the amount of work we are putting out there in our business there is a pretty significant time lag between that and payment..... and banks dont like to wait for repayments! (even though they have to at the moment)
Other creative means we are thinking of is upping our yield from the properties. Some that were on long term rent we have now furnished and are putting out for short term lease, much improved yield (although greater vacancy risk and of course more risk of damage as more *stuff* to get wrecked)
In terms of development we are unsure whether to use what valuable cashflow we have left after the above to try and move forward or just hold on until the general property environment moves in a more upward direction.
Are there any others out there facing the same dilemmas? We are very pleased with the growth we have had in our investing journey so far and even though we view this stage as just an "opportunity to consolidate" it can get pretty tough trying to make long term decisions whilst juggling the month to month stuff. We think this downward or flat cycle (in Perth mainly) might last up to another 2 years or so and maybe that is the time to keep pushing on because we would hate to risk our portfolio on developments that might not be as lucrative as we first thought.
Love to hear others ideas and strategies...it all helps!
Thank you all